Introduction:
This is the second of a 2 part article on the 2013 OTTCON. The first article looked at how Pay TV providers could offer OTT content on second screen devices and also how OTT and local providers (Pay TV or ISPs) could partner together to offer OTT content to subscribers. This second article examines how video network infrastructures need to evolve to support both Pay TV and OTT content.
Video Network Architectures: #
With live linear, Video on Demand (VoD) and now OTT content, delivery of multiple concurrent video services has become increasingly complex for pay TV service providers. Nonetheless, providing access to quality video must remain a core competency of Service Providers (SP), else they’ll lose customers to competing offerings. With the amount of content available today, SPs’ network infrastructures need to be able to handle network capacity issues in order to seamlessly deliver video content from the cloud to TVs, PCs and mobile devices. That could involve costly network investments.
Service providers not only need to expand the accessibility of quality content to new screens, but they need to do this while meeting consumers’ expectations of a seamless content viewing experience when switching from one type of video to the other. Quality of Service (QoS) will have a very strong impact on viewer engagement.
Content protection is another top concern for SPs. It preserves content revenues among their subscriber base. Ensuring that only authorized subscribers access certain content can be difficult, especially with the expansion of viewing platforms. It is critical that video SPs address content security, entitlements and authorization.
As viewing continues to increase on new screens and platforms, multi-screen services will continue to be a priority. The various screens will require different video formats that need to be well-managed and secure to provide a seamless ‘video anywhere’ experience.
All of the above factors will require new video architectures with enhanced hardware and software platforms needed to deliver OTT content. A high level view of an OTT architecture (courtesy of Discretix) is shown below. The figure does not include 3G/4G wireless access to OTT content because almost all mobile devices will access OTT content via an in-home WiFi network which connects to a Residential Gateway.
A more comprehensive video network architecture was described by Microsoft and Alcatel-Lucent in a 2013 OTTCON session titled, “Strategies of Unlocking Additional Values from OTT.” That session was directed at existing Pay TV SPs that wanted to deliver OTT content along with their existing linear and video on demand (VoD) programming.
OTT value creation was said to have three underlieing pillars:
- Integrated TV platform across experiences and devices
- Build OTT experiences tied to core TV proposition
- Web analytics and Internet speed applied to TV
The figure below depicts how a SP video network could adapt to support OTT content delivery. Among the key network functions are:
- Redistribute STB functions to CE/clients and the home network
- A highly distributed Content Delivery Network (CDN)* for uni-cast scaling and multi-cast video (which has been demonstrated by Ericsson)
- Session based personalization to create new value for consumers, content owners and advertisers
- Agile back office architecture to launch and evolve services cost-effectively
*A CDN is a large distributed system of servers deployed in multiple data centers across the Internet. It provides lower latency content services to end-users with higher availability and performance than the “best effort” Internet
The Unified Video Network illustration below shows unified content distribution, distributed caching (of video content) and re-purposed video servers to permit SPs to reuse existing assets.
Personalization in the core SP network is shown in the figure below.
Microsoft’s Media Room* was said to be the market leading IPTV software platform with 50 deployments in 23 countries, including AT&T (U.S), Deutsche Telekom (Germany), and Sonus (Canada). Alcatel -Lucent claims to be number one in video network and systems integration with 30 network operators using their equipment, according to the company.
Microsoft and Alcatel-Lucent platforms are used by AT&T U-Verse which announced second screen video content delivery last July, but has yet to make it available (as noted in the comments directly below the Part I article.
http://viodi.com/2013/04/01/multi-screen-video-content-and-ott-partnerships-enabled-by-new-video-network-architectures/ #
*Editor’s Note: It will be interesting to see what happens with Alcatel – Lucent’s ability to resell/integrate Mediaroom if the rumors prove true that Alcatel Lucent rival Ericsson will acquire the Mediaroom platform from Microsoft.
Addendum:
While not participating in OTTCON, Chinese telecom equipment vendors ZTE and Huawei also have a well-established role in the IPTV market, based on strong and growing IPTV platforms within China (e.g. China Telecom).
“There is a strong split in the IPTV middleware market between system integrators providing an entire solution and specialists in applications and customer experience,” according to Sam Rosen, ABI Research practice director for TV & video. “With the exception of Cisco, who recently purchased NDS, the system integrator’s role in customer experience will likely decline over the next few years; instead, this role will be left to client-centric middleware companies with better user experience,” added Rosen. The analyst stated that Viaccess-Orca (a subsidiary of France Telecom), Netgem and others, each have their own unique philosophy on how to create an IPTV system. ABI Research forecasts that IPTV households will grow from 80 million in 2012 to 117 million in 2017, with growth driven by Asia-Pacific.
http://www.abiresearch.com/press/microsoft-extends-lead-to-23-of-the-iptv-middlewar
10 replies on “Multi-Screen Video Content and OTT Partnerships Enabled by New Video Network Architectures – Part 2 of 2”
Thanks Alan for reporting on OTTCon and writing this particular piece. While you were at OTTCon, I was at the Minnesota Telecom Association where, coincidentally, an informal Mediaroom Users Group meeting was being held.
This was truly the user’s who are deploying the Mediaroom product. Most of these are independent telcos that have had one or two generations of IPTV already. As pointed out in the ABI Research, Microsoft has done a good job of penetrating the telco market and, surprisingly, the tier 3 and tier 4 market.
I say surprisingly because when it was launched with AT&T, large operators were the focus. Alcatel Lucent has indeed been one of the big system integrators (I have seen several deployments in smaller markets) to help the smaller operators.
It was Cisco’s departure from the IPTV middleware that provided the opportunity for Mediaroom to be deployed with these smaller entities. That they had this informal user’s group indicates that they are getting past the initial installation and starting to think about adding new apps, devices, etc.
It will be interesting to see how an Ericsson purchase of Mediaroom will impact the Alcatel Lucent customers. In this world of coopetition, it probably won’t matter. But, the reaction of one of the operators who heard the news about Microsoft selling Mediaroom was, “That sucks.”
Ken,
Thanks for your very informative comment. Do you remember we first met in Fall of 2004 at an IPTV Session you chaired in Las Vegas? I was very skeptical about IPTV at that time, but not now. I’ve been a U-Verse TV/Internet customer for 1 yr and the quality is excellent. But there is no OTT content available today on the U-Verse platform- for ANY SCREEN, including the TV. Why is that? On the AT&T U-Verse discussion boards, one is told to buy the Roku, Apple TV (or similar) converter box, to get MLB.com, NHL Center Ice, etc on your TV because U-Verse doesn’t provide those channels. Again, why not AT&T?
I could speculate, but I have no idea on why the delay on OTT on uVerse. It is ironic, as they were as investor in and were going to adopt the platform of OTT pioneer Akimbo.
http://www.viodi.com/newsletter/060401/#over
I still think there is an opportunity to create a middleware using GoogleTV. A tech savvy operator could probably use the open source GoogleTV to create a middleware or they could use someone like an iRevo, whose CEO I interviewed at the TV Next 2012 conference:
http://www.viodi.tv/2012/10/23/googletv-as-an-operators-middleware/
Interesting, it is 9 years since we met at an IPTV conference session and there are still lots of questions about how best to implement IPTV and even what IPTV is.
Hi Alan, appreciate the write-up. Just wanted reinforce your observation that Ben Huang (MSFT) and I were guiding IPTV providers on how they too can leverage OTT technologies to benefit consumers, content owners and themselves. To me that means HTTP streaming of adaptive bit rates to connected devices able to decrypt, render EPGs and play video without a set top box. As pointed in your article, a CDN is the way of doing this at scale and at the lowest cost. This is equally true for Cable/MSOs as well. Having watched this market for several years, I’m seeing a gap form now between traditional CDNs designed to stream video “over-the-top” of IP networks versus on-net CDNs designed to stream video “inside” of them. My message to operators was about the latter and how they should treat their on-net CDN as being central to their core video network and not an overlay. Bringing it inside their core network creates opportunities for server-side optimizations that leverage network conditions, contextual information and user preferences (and the slides in your article spell out a few of the near-term use cases). A quick note too that the 30 customers quoted refers to those using Mediaroom and with Alcatel-Lucent as systems integrator. cheers/Jim http://www.alcatel-lucent.com/ip-video
Terrific article and great comments! What will Alcatel-Lucent do if MSFT sells its Mediaroom platform to Ericsson? And why does MSFT want to exit the IPTV software business?
Why hasn’t AT&T U-Verse offered OTT video content to subscribers? They use Microsoft Media Room with Alcatel-Lucent as systems integrator?
Just logged into the U-verse.com site as a U-Verse Internet (&TV) subscriber. http://uverseonline.att.net/uv/
I could ONLY access 2 live channels=CNN and Fox News. All the other content is on-demand programming. And NONE of the content comes from U-Verse TV STB/Residential GW- it’s from a broadband Internet connection to the u-verse.com website.
Global IPTV revenue is expected to increase at a CAGR of 16 percent over the next five years to reach $43.8 billion in 2017, with North America accounting for nearly half of total revenue, according to the newest report in the Research in Focus: IPTV series.
“North American revenue from IPTV subscriptions totaled $10.2 billion in 2012, a number that is anticipated to reach $21.4 billion in 2017, propelled primarily by both subscription and ARPS growth,” says Pyramid Research Associate Analyst, Guillermo Hurtado. North American ARPS stood at $76.53 in 2012, the world’s highest, at more than three times the global average. In addition, IPTV penetration levels in North America will reach 20.3 percent of households by year-end 2017, more than twice the global average, he notes.
The three largest country-markets (China, France and the US) each had over 10m IPTV subscriptions at year-end 2012 and together accounted for roughly 53% of the global IPTV subscription base. The Asia-Pacific region remains the largest IPTV market, accounting for 45.3% (38.2m) of global IPTV subscriptions as of year-end 2012. IPTV household penetration levels vary greatly across regions. Western Europe and North America have the highest penetration rates, at 14.4% and 8.8%, respectively. Meanwhile, the lowest penetration rates are seen in Latin America (0.6%) and Africa and the Middle East (0.3%). We expect household penetration levels to increase across all regions. IPTV’s share of global pay-TV subscriptions will increase from 9.3% in 2012 to 15.8% in 2017. Between 2012 and 2017, Pyramid Research forecasts that global IPTV revenue will increase at a 16% CAGR, reaching $44bn at the end of the period.
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As a quarterly subscription or as a one-off resource, Research in Focus: IPTV offers analysis on global and regional subscription trends, as well as ARPS, pricing and revenue trends through 2017. This series of reports also provides five-year historical data and projections on IPTV for up to 60 markets around the world, with an excel document that contains the full data referenced in the report.
http://www.pyramidresearch.com/store/Research-in-Focus-IPTV.htm?sc=GL040413_RIFIPTVNA
Today (April 8th), Ericsson reached an agreement with Microsoft to acquire its IPTV Mediaroom software business. This will make Ericsson the leading provider of IPTV and multi-screen solutions with a market share of over 25%. Closing expected during the second half of 2013. Mediaroom is situated in Mt View, CA and employs more than 400 people worldwide. The global IPTV market is estimated to reach 76 million subscribers in 2013 with revenues of 32 BUSD, growing to 105 million subscribers and 45 BUSD in 2015.
“Ericsson’s vision of the Networked Society foresees 50 billion devices to be connected via broadband, mobility and cloud. Future video distribution will have a similar impact on consumer behavior and consumption as mobile voice has had. This acquisition contributes to a leading position for Ericsson with more than 40 customers, serving over 11 million subscriber households. In addition, Ericsson will be powered with senior competence and some of the most talented people within the field of IPTV distribution.”
“Mediaroom is the leading platform for video distribution deployed with the world’s largest IPTV operators. This strategic acquisition positions Ericsson as an industry leader thanks to the skills and experiences of the talented people of Mediaroom combined with Ericsson’s end to end service capabilities” Borgklint concluded.
The total media solution portfolio of Ericsson in the TV and video space combined with a further increased focus on consumer needs will be the foundation for providing services to end users. The importance of video distribution capabilities for the customers and their consumers will be increasing as more and more LTE networks are deployed and filled with smartphone users.
“We are proud of the number one IPTV market position that we have achieved with Mediaroom. Ericsson’s complementary portfolio of TV and networking services will help drive the future growth and development of Mediaroom,” said Tom Gibbons, Corporate Vice President of Microsoft Corporation. “Ericsson is positioned to be a valuable strategic partner for operators and TV service providers around the world as the IPTV market evolves.”
Microsoft Mediaroom is the TV technology behind many of the world’s leading television service providers like AT&T U-verse®, Entertain of Deutsche Telekom, Telefonica, TELUS Optik TV(TM) and Swisscom. Mediaroom-powered TV services are offered on more than 22 million set top boxes deployed throughout the Americas, EMEA and APAC.
http://www.ericsson.com/news/1691160
One has to wonder if Alcatel-Lucent will make an effort to help shape thePlatform to become a traditional IPTV solution (although with the way the technology is developing, it seems like technologies that originally served OTT applications are becoming IPTV), if Ericsson views Alcatel-Lucent as a competitor, instead of another integrator.
In this interview, Marty Roberts of thePlatform talks about multiscreen as well as their relationship with Alcatel-Lucent.
http://www.viodi.tv/2012/12/18/getting-to-more-screens/
This could get very interesting..